If you have USB HDD rack, connect regular 5.25" DVD Drive to its connectors. If you have ATA USB rack you must use ATA DVD drive (set its jumper to "master") and if you have SATA USB rack you must use (imagine that!) SATA DVD drive. I know DVD drive wont fit into USB rack, but it doesn't have to, as long as its connected to it (both power connector and ATA/SATA connector)... Power up your rack, connect it to Netbook's USB, It should recognize it as USB DVD/CDROM. Now just put WinXP/Vista/Win7 disk and install it...
I tried all other suggestions here, but for me only this method worked, so there's another option if anyone has problems with installing windows...

Anonymous

July 16, 2010 at 1:22 pm

If you're working on a Windows 7 system, then you don't need any special tools to get this done. Just insert your USB drive and format it. Then, insert the Windows 7 DVD, or mount the image to a virtual drive. Then go to the command prompt (Start > Run > cmd.exe) and run the following command:

xcopy x:*.* /f /e /s y:

where x: is the drive letter of your optical/virtual drive
and y: is the drive letter of USB drive.

Aibek

July 5, 2010 at 6:10 am

Hey Farhad,

So did you manage to create it? Did the above link helped? Let us know.